Downloads Folder.

[Naso]

What Is It exactly used for, and should I leave all those files that accumulate In there alone?

[loopyman]

Just leave it alone.

[Naso]

Oh, I have been deleting all the files that pop up in there.

[loopyman]

Yea, just leave it alone, it does no harm.

[Drocona]

Deleting doesn't harm anything either, just to make you feel comfortable.

The downloads folder contains file lists that people have downloaded from your server and it also contains sprays form players that are uploaded to your server to redistribute to the players so they can see it too. Deleting these files simply makes the server add them again when that particular player joins again.
So you can basically do anything with it you like, you can even schedule winsdows/linux to clear the folder every once in a while to keep the disk space low.